Universal Logistics Holdings Acquires Parsec, a Market-Leading Rail Terminal Operator

Rhea-AI Summary

Universal Logistics Holdings (NASDAQ: ULH) has acquired Parsec, a leading provider of terminal management services to railroads across North America. Parsec operates in over 20 rail yards in the US and Canada, offering container lift services, equipment repair, drayage, and container stacking. The acquisition, valued at $193.6 million, is expected to be immediately accretive and boost Universal's contract logistics segment revenues to over $1 billion annually.

Parsec reported total operating revenues of $230.2 million for the trailing-twelve months ended August 31, 2024. With nearly 2,100 employees, Parsec will operate within Universal's contract logistics segment. The acquisition aims to diversify Universal's service offering and provide a significant presence in the rail terminal services space.

Positive

• Acquisition expected to be immediately accretive to earnings
• Boosts Universal's contract logistics segment revenues to over $1 billion annually
• Expands Universal's presence in the rail terminal services market
• Diversifies Universal's contract logistics service offering
• Adds Parsec's $230.2 million in trailing-twelve-month operating revenues

Negative

• Significant cash outlay of $193.6 million for the acquisition
• Potential integration challenges with 2,100 new employees
• Increased exposure to rail industry fluctuations

WARREN, Mich., Sept. 30, 2024 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH) announced today its acquisition of Parsec, LLC, Parsec Intermodal of Canada ULC, and OB Leasing, LLC (collectively "Parsec"). Parsec is a market-leading provider of terminal management services to the Class I, regional, and short-line railroads across North America. With a highly-skilled workforce of nearly 2,100 employees, Parsec offers a comprehensive suite of terminal services at over 20 rail yards throughout the United States and in Canada. Parsec specializes in time-sensitive, container lift on and lift off services ensuring efficient and reliable operations at some of the most complex rail yards across the country. Among other services, Parsec also provides crane and intermodal equipment repair, drayage, and container and chassis stacking. For the trailing-twelve months ended August 31, 2024, Parsec reported total operating revenues of $230.2 million. Parsec will operate within Universal's contract logistics segment, and the transaction is expected to be immediately accretive.

"I am extremely excited to welcome Parsec to the Universal family of companies," stated Universal's CEO Tim Phillips. "This is an exciting opportunity to build on Parsec's long-standing customer relationships and further diversify our contract logistics service offering. Partnering with the railroads for over 35 years, Parsec is a go-to service provider offering rail yard terminal solutions. This strategic acquisition further enhances our value-added service offering, and provides Universal a meaningful presence in the rail terminal services space. On an annualized basis, the acquisition of Parsec is expected to boost Universal's contract logistics segment revenues to over $1 billion." 

The cash purchase price was $193.6 million, subject to customary post-closing adjustments. Dykema Gossett PLLC and Vistula PLC served as Universal's legal advisors on the transaction. Livingstone Partners served as exclusive financial advisor to Parsec, and Katz Teller served as Parsec's legal advisor.

About Universal

Universal Logistics Holdings, Inc. ("Universal") is a holding company whose subsidiaries provide a variety of customized transportation and logistics solutions throughout the United States and in Mexico, Canada and Colombia. Our operating subsidiaries provide our customers with supply chain solutions that can be scaled to meet their changing demands. We offer our customers a broad array of services across their entire supply chain, including truckload, brokerage, intermodal, dedicated and value-added services. In this press release, the terms "us," "we," "our," or the "Company" refer to Universal and its consolidated subsidiaries.

Forward Looking Statements

Some of the statements contained in this press release might be considered forward-looking statements. These statements identify prospective information. Forward-looking statements can be identified by words such as: "expect," "expected to," "anticipate," "intend," "plan," "goal," "prospect," "seek," "believe," "targets," "project," "estimate," "future," "likely," "may," "should" and similar references to future periods. Forward-looking statements are based on information available at the time and/or management's good faith belief with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. These forward-looking statements are subject to a number of factors that may cause actual results to differ materially from the expectations described. Additional information about the factors that may adversely affect these forward-looking statements is contained in Universal's reports and filings with the Securities and Exchange Commission. Universal assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws.

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SOURCE Universal Logistics Holdings, Inc.

FAQ

What company did Universal Logistics Holdings (ULH) acquire?

Universal Logistics Holdings (ULH) acquired Parsec, a market-leading provider of terminal management services to railroads across North America.

How much did Universal Logistics Holdings (ULH) pay for Parsec?

Universal Logistics Holdings (ULH) paid $193.6 million in cash for Parsec, subject to customary post-closing adjustments.

What were Parsec's operating revenues for the trailing-twelve months before the acquisition by ULH?

Parsec reported total operating revenues of $230.2 million for the trailing-twelve months ended August 31, 2024.

How will the Parsec acquisition affect Universal Logistics Holdings' (ULH) contract logistics segment?

The acquisition is expected to boost Universal Logistics Holdings' (ULH) contract logistics segment revenues to over $1 billion annually on an annualized basis.

In how many rail yards does Parsec operate after being acquired by Universal Logistics Holdings (ULH)?

Parsec operates in over 20 rail yards throughout the United States and in Canada.